Introduction to Ireland’s Fin Tech Industry

Fintech Forum, Seoul, April 14, 2015

Presented by Derek Fitzgerald

Director of Japan, IDA Ireland

– 70,280 Sq. Kilometres

– 4.6 Million People

– Member of EU & Euro

– Highly skilled workforce

– English speaking

– GDP €175 billion

– Exports €154 billion

– 1,000+ Multi National Companies

Ireland in Focus

IDA Business Focus

Information Communication

Technology

Life Sciences

Engineering, Industrial & Clean

Industries

International Financial Services

Content Industry, Consumer & Business

Services

Global Business Services

High Value Manufacturing

Research, Development &

Innovation

Food

Current Impact of FDI

Why Financial Services in Ireland

Track Record

Talent

Technology &

Transformation

Tax

Regulation

Research & Innovation

• Leading Jurisdiction for Foreign Direct Investment (FDI) • 1000+ international companies • 500+ operating in Financial Services and ICT sectors• Full Range of Back, Middle and Front Office activities

• 30,000+ employed in Financial Services industry• Access to EU labour market & fast track visa / work permit process• 20,000 graduates per annum in Business and IT related disciplines

• Strong FinTech cluster and Technology development activity • History of Transformation & Innovation across industry sectors

• Competitive 12.5% corporate tax rate• 25% tax credit on R&D activities• Special Assignment Relief Program for senior company executives – Exemption on income tax for 30% of salary between €75k-500k

• EU Regulatory Passport • Third Country Branch option for non-EU institutions

• Financial services companies undertaking significant R&D projects • Major active research programmes in Governance, Risk, Compliance (GRC), Data Analytics, Process Optimisation, etc

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500+ Companies employing over 32,000 people

80+ leading Global Banks

8 of the top 10 Global Fund Administrators

41% of the World’s Hedge Funds are serviced from Ireland

No.1 location in Europe for Cross Border Life Insurance

9 of the Top 20 Global Financial Technology Companies

International Headquarters Global Transaction Services International Operations Centres

Corporate Treasury Customer Support International Payments

Financial Shared Services Asset Management International Tax

Fund Administration Services Research & Development Trustee Services

Innovation Labs Compliance & Risk Software Engineering

Advisory Services Financial Services Technology

Activities in Ireland

International Financial Services In Ireland

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Banking

Investment

Management

Insurance

Major Global Financial Institutes in Ireland

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A home to Global ICT players

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Activities of ICT Companies

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Financial Technology in Ireland: Fully Revolving Eco System

Online/Mobile Banking

Risk Modelling, Management &

Compliance

Security & Transparency

Data & Predictive Analysis / Business

Intelligence

Automation

E-PaymentsFinancial

Services Cluster

Software / ICT

Cluster

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– World’s Leading International Security

Technology companies developing and

supporting Security Technology in Ireland

The top 3 global software security companies (e.g.

Symantec, McAfee, Trend) have strategic operations

in Ireland

– 40+ Indigenous Irish Security Technology

Companies add to the Security Cluster in

Ireland (e.g. Daon)

– Cluster is supported by growing security

research capability in Irish Universities

Ireland’s International CyberSecurity Cluster: : Fintech needs Cyber Security

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Distributed access control, autonomic security trust, security analysis & security risk management

Research into all aspects of distributed computing extending from theoretical foundations to system engineering issues. Expertise in the areas of ubiquitous computing, mobile computing and software engineering.

IT Security &

Cryptography

Software &

Technology

Optimisation

Network Analysis &

Data Analytics

Cybercrime &

Fraud Analysis

Illegal distribution of software, abuses of multiplayer online gaming, mobile forensics

Some Irish Research Institutions (in the Software, Security & Analytics space)

Research Focus Research StrandsResearch

Centres

Research in coding theory and cryptography, discrete mathematics, algebra and number theory

Analysis & visualisation of graphs and social / biological networks. Matrix analysis techniques, information flow monitoring, discovering network structure

Development of more reliable & secure software, encompassing software code refinement, verification and automatic program construction

Centre for

Cybercrime

Investigation

Clique

Research

Cluster

Computer

Science

Centre

Dependable

Systems

Group

Identity based encryption & signature schemes, cryptanalysis & biometric cryptography, smart card security

Computer

Security &

Cryptography

Group

Fundamental & applied research in IT security for data communication networks, authentication & access control schemes, formal verification of security protocols using steganography & information hiding

Data-Comm

Security

Laboratory

Dependable

Systems

Group12

Multinational Companies in the Big Data/Data Analytics Space

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Primary Research Institutes - Analytics

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Centre for Data Analytics Research

www.insight-centre.org

Developing next generation data analytical and Big Data technologies.

Originally DERI (Digital Enterprise Research Institute),CLARITY (Centre for Sensor Web Technologies), Clique(Graph and Network Cluster Analysis) and 4C (CorkConstraint Computation Centre).

30+ industry partners, 200+ researchers, €88minvestment.

Role involves supplying analytical talent to industry.

Six primary research areas:

Machine Learning and Statistics

Optimization and Decision Analytics

Media Analytics

Semantic Web and Linked Data

Personalisation/Recommender Systems

Sensor Web

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Centre for Applied Data Analytics Research (“CeADAR”)

– Recently-established Government-funded Applied Analytics Research Centre

– Collaboration between private sector and academia

– Research is focused around three themes:

1) Intelligent Analytical Interfaces (e.g. smart analytics, ease of user interaction and change user behaviour) (DIT)

2) Data Management for Analytics (e.g. data validation and data curation) (UCC)

3) Advanced Analytics (e.g. social trending & contextualisation, and continuous analytics) (UCD)

– Participating companies include: AON, eBay, Accenture, Dell, Fidelity Investments, Adaptive Mobile, Climote, Cylon, GBR, HP, Moving Media, Nathean Technologies, Nucleus Venture Partners, and Qumas.

– Mission: “to accelerate the development, deployment and adoption of data analytics technology, as well as develop ways of generating business, profit and ultimately jobs from data analytics”

– CeADAR will also conduct initial research into technology challenges

– that have been identified by industry representatives

– Opportunity for UBS to participate ?

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Financial Incentives for R&D activities in Ireland

3. Training Grants (available throughout Ireland)• General and/or Specific Training may be supported• Grant level is determined following assessment by

training specialist

4. Tax Credit• A Tax Credit of 25% against qualifying R&D

expenditure is available in Ireland.• Effective benefit of 37.5%• Monetisation-possible repayment of excess credits

over three year cycle• Credit can be converted into tax efficient bonuses

for R&D

http://www.revenue.ie/en/tax/ct/research-development.html

IDA Ireland can support companies by providing financial aid by way of Employment

Grants, R&D Grants and Training Grants, depending on the investment parameters.

1. Employment Grants (available in designated areas)• Available in specific locations in Ireland (e.g. Galway but

not Dublin)• Fixed amount agreed per new position created over a

period of years.

2. Research, Development & Innovation (available throughout Ireland)• Agreed Research Program• Grant support generally in the range of 5 - 15%• Grant level is determined following assessment by

technical specialist

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Why Ireland? – TaxationPredictable. Stable. Consistent. Competitive.

– Continued commitment to maintaining the 12.5% rate

– One of the world’s most attractive allowance schemes for the acquisition of

IP:

• Cost of acquiring IP (or other intangible assets) can be written off against

80% of income over 15 years

• Potential for only 20% of income therefore to be taxable

• No stamp duty on the sales/transfer/disposition of IP

– Extensive tax treaty network (agreements with 71 countries & growing)

– Enhancement to R&D offering- proposed knowledge development box

currently under consultancy to be ‘best in class’ regime, whilst also being in

line with current international consensus on what is acceptable for such a

regime.

12.5%

Corporate Tax

Rate

1st for

corporate

taxes

25% R&D

credit

Extensive

Tax Treaty

network

12.5%

1st

25%

extensive

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Legal Benefits for IP Protection in Ireland

– Common law environment offering familiarity to Indian companies

– Longest history in IP protection with cutting edge legislation: first recorded copyright case in 560AD…….with all legislation updated for the digital age

– One of the most effective and rapid litigation systems in the world (Irish Commercial Court – judgements in 4-6 months vs at least 24-36 months in most other jurisdictions)

– Ireland has a strong community of IP lawyers operating in this area, with rapid specialisation currently underway; Furthermore, there is strong growth in the number of specialist courses at post-graduate and graduate level in Ireland

– Recognition of judgements in Ireland by other EU states (Brussels1)

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Data Protection

EU Data Protection law and by extension Irish law allows a company providing services across the EEA (European Economic Area) to establish itself principally in one EU member state (e.g. Ireland) and assert that it is subject to the data protection law of that member state in providing services across the EEA.

In order to validly claim the applicability of one member state law in such circumstances, there must be effective control and decision making regarding user personal data in that jurisdiction.

The Irish Data Protection Commissioner www.dataprotection.ie:

Provides guidance on how to comply

Is solution focused

Adopts a pragmatic approach

Helps companies develop practices that demonstrate that they are good corporate citizens (e.g. privacy officers, privacy by design)

The Irish Government allocated additional resources and doubled the budget of the Office of the Data Protection Commissioner from €1.89m to €3.65m in December 2014

Will be heavily involved in proposed new European General Data Protection Regulation

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At a Glance

Citi is the world’s largest financial

services group, operating in 160

countries with 200 million consumer

accounts. Citi employ 266,000

people. Major business lines

include: Regional Consumer

Banking, Securities and Banking,

Transaction Services, Institutional

Clients Group.

Irish Operation

Citi employ 2500 people in Ireland

Citi has three direct operations:

• Service Centre (Dublin)

• Regional Fund Administration (Waterford)

• Research, Development & Innovation Centre

(Dublin)

Activities include:

•Banking headquarters,

•Global Processing Centre,

•Fund Servicing,

•Commercial Banking,

•Private Banking/Wealth Management

R,D & I Centre competencies: $45 million R&D Centre, 100+ Staff

•Asset Pooling,

•E-banking,

•Money Laundering, •Cross border payments.

“Ireland was chosen as

the location of choice

for these new roles due

to the calibre of our

employees and the

depth of expertise and

innovative thinking

inherent in our

workforce which has

enabled Citi Ireland to

continue to win

business and become

the leader in Services

Innovation for the

organisation

worldwide”.

Aidan Brady, Citi Country Officer

in Ireland

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Case

At a Glance

Aon is a leading global insurance and

reinsurance broker, providing

property/casualty, liability, workers'

compensation, and other insurance

products for groups and businesses,

as well as risk management services.

Irish Operation

Aon Centre for Innovation & Analytics (ACIA)

Based in Dublin, the Aon Centre for Innovation and

Analytics was established in 2008 as a global research

centre to provide support to Aon. Aon invested

€30million in the centre, which is the focal point for

the development and rollout of a number of initiatives,

most notably the Global Risk Insight Platform

(GRIP). ACIA currently employs 90 people.

Purpose:

• Aggregate and streamline data flows from multiple

sources across the world;

• Perform detailed analysis and validation on data

flows;

• Develop ground breaking, innovative and best-in-

class products.

“Ireland was attractive

to us, not only because

of its geographical

position, time zone,

and availability of a

well educated

workforce, but

because we were able

to leverage an already

attractive business

with a strong portfolio

and an established

track record in the

market here”

Stephen Cross, CEO of Aon Global

Risk Consulting

in Ireland

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At a Glance

Accenture is a global management

consulting, technology services and

outsourcing company. Accenture

collaborates with clients to help

them become high-performance

businesses and governments.

Irish Operation

Accenture employs 1500 people in Ireland

The Irish operations are divided across 5 operating

groups: Communications, Media & Technology,

Financial Services, Public Service, Products and

Resources.

•Irish Consulting Centre (1,250+ people),

Established 1999

•European Shared Services Centre (260

people), Established 1999

The Shared Services Centre in Dublin provides

financial accounting, cash management, human

resources, IT services and data support to

Accenture’s offices across 15 European countries.

•Analytics Innovation Centre, (100 people),

Established 2010

The Centre is a global showcase for Accenture’s

analytical capabilities. The centre delivers

compliance and fraud related analytics solutions to

clients worldwide.

“Thanks to the

tireless efforts of IDA

Ireland, this country

now has a growing

reputation as a

global hub for

technology research

and innovation, with

Accenture being one

of several companies

to recently choose

Ireland as an

investment location,

ahead of other

countries”

Country Managing Director,

Accenture Ireland, Mark Ryan

in Ireland

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At a Glance

PayPal’s vision is to help people

pay for things anytime, anywhere

and on any type of electronic

device, and to make money to work

better for consumers and

businesses at a time when the line

between the online world and the

high street is breaking down.

Irish Operation

PayPal employ 1400+ people in Ireland

PayPal’s European operation centre opened in

Dublin in 2003. Since then the number of staff has

increased from just 25 to more than 1,400 today. In

2009, PayPal invested €15 million in the

establishment of a European Centre of Excellence

in Blanchardstown, with the support of IDA Ireland.

The Dublin operation manages over 42 million

active accounts across the EMEA region.

Activities Include:

• European Customer Services

• Risk & Fraud Management

• Merchant Solutions

• Operational Excellence

Recent Announcements:

In February 2012, PayPal announced the creation

of 1,000 jobs over the next four years at PayPal’s

new European Operations Centre in Dundalk, Co

Louth.

"PayPal’s continuing

success story means

that we need to

expand our excellent

team in Dublin for the

fourth time in the last

two years. We have

gone from strength to

strength since the

Taoiseach officially

opened our European

Centre of Excellence in

March 2009”

Louise Phelan, Senior Director for

Global Customer Services & EU

Merchant Services.

in Ireland

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IDA Ireland Overseas Locations

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Thank You 감사합니다Contact Details: James ParkIDA Ireland, Korea OfficeT) +82-2-721-7217M) +82-10-3472-8178E) james.park@ida.ie